The future of transport: electric vehicles

As car manufacturers rush to launch electric models, are consumers and fleet operators really ready to buy them? In the second of our series on the changing world of mobility, we look at the benefits of EV adoption and the realistic rollout in the coming years.

The switch to EVs by all transport users – from consumers to fleet users to public-transport providers – is becoming imperative if we are to combat climate change. Transport contributes 23% of global greenhouse gas (GHG) emissions and is growing faster than any other energy use sector. If we are to limit global temperature increases, we urgently need to reduce transport emissions. Zero-emission vehicles – EVs and hydrogen fuel-cell vehicles – are the only solution.

And British drivers are ready to make the switch, judging by recent figures from the Society of Motor Manufacturers and Traders (SMMT), which show that the number of electrified cars on UK roads grew by three quarters last year.

But while there are now a record number of plug-in vehicles on our roads (195,410, in fact) – and overall ownership of what the SMMT calls alternatively fuelled vehicles (AFVs) increased by almost 30% last year to more than 620,000 hybrid, plug-in hybrid, and battery electric cars – that’s still a drop in the ocean compared with the 34.9m cars owned by British drivers.

Big-name brands launching electric-only models

Major manufacturers are now bolstering their product ranges with new electric-only models: there are 27 slated for launch in 2019 – 2020, from electric derivatives of existing models, such as the Seat Mii and Skoda Citigo urban cars, to a fully electric Mini and major models from Audi, Mercedes-Benz, Volkswagen and Porsche. Many of these cars will be genuinely cutting edge and have longer ranges than most current EVs – albeit at a price.

And price is certainly an issue, one that is perhaps second only to the potential for range anxiety among prospective car buyers. But again, there is good news on the horizon, as the cost of EVs is set to fall in the coming years.

Colin McKerracher, lead advanced transport analyst at Bloomberg New Energy Futures, says: “You’re seeing battery costs decline precipitously. Once you add that up in all models, electric vehicles become cheaper – not just from a total cost of ownership basis but on an upfront basis, beginning around 2025 or 2026. Within six or seven years, we see them being cheaper on an upfront basis than comparable cars with internal combustion engines because of these declines in battery cost.”

We’re looking at enabling an increase in infrastructure that means destination charging is possible, and upgrading supply so places such as motorway service stations are future-proofed.

Pete Abson
Public Affairs and Policy Senior Manager, National Grid

Money talks – and EVs that are as cheap to buy and cheaper to run than cars with internal combustion engines will start to look very attractive to car buyers – especially as attitudes change. “I do think we are seeing a shift in the public’s perception of internal combustion engine vehicles,” McKerracher adds. “If you look at some of the drops in the diesel shares in vehicles in European countries – and particularly in European capitals – it’s happening reasonably fast.

“There is that growing recognition of health impacts. Individual consumers might not necessarily be changing their purchasing decisions based on those, but people do make relatively sophisticated calculations around expected residual values of their vehicles. When that starts to become uncertain, as it is becoming for diesel vehicles, consumer behaviour responds. And what you’re seeing is diesel vehicles face an uncertain future, both in terms of residual values and taxation across Europe – and, in particular, in European capitals, with municipal governments responding to consumers’ concerns, which are starting to show in the sales.”

Infrastructure remains a pressing concern

So manufacturers are playing their part and car buyers are coming around – which leaves just one more piece of the jigsaw to be covered: charging infrastructure.

Darren Jukes, leader of industry for industrial products and services at PwC, says: “You need the infrastructure that facilitates widespread charging of these vehicles. It’s all very well for people living in homes where you can park on a drive, plug it in a socket and charge overnight. But if you live in areas where you don’t have off-street parking, those features aren’t available to you.

“So how do we put the infrastructure in place to facilitate charging in those situations – and charging during journeys because not every journey is going to be less than 300 miles. Does intermittent charging work? And how does charging technology develop to the point where it takes broadly the same time to recharge as it does to pull up to a forecourt today and refuel?”

Those are all good questions – and ones that are now being addressed. For example, 40% of households in the UK don’t have off-street parking or a suitable location for a home charger, but four potential solutions have been identified by Natalia Silverstone, previously a senior consultant at charge-point provider Pod Point.

“First, we can use existing parking at locations such as shopping centres and multistorey car parks. Then there are on-street charging options, such as lamppost charging. When EVs become autonomous, they will be able to take themselves off to charge before returning to the owner or user. And finally, changes in vehicle ownership and usership will just change charging locations and the types of charging needed.”

Current EV drivers will also tell you that charging an EV is a lot like charging a mobile phone: you never let the battery get anywhere close to 0% and you take every opportunity you can to top that up, wherever that is.

Charging will create opportunities

As EVs become more widespread, we will see many more charging opportunities. BP Chargemaster is installing over 400 150 kilowatt (kW) chargers at its filling stations by 2021, while the National Grid also has ambitious plans. Pete Abson, public affairs and policy senior manager at the National Grid, says: “We’re looking at enabling an increase in infrastructure that means destination charging is possible, and upgrading supply so places such as motorway service stations are future-proofed. We think that 350kW ultra-rapid fast chargers are possible in the future – which is perhaps the best way to ensure that range anxiety is eliminated.”

Of course, all the pieces of this jigsaw have to fall into place – and fit together. Public and private sectors have to work together, with the former facilitating the latter: a combination of carrots and sticks will undoubtedly be required to get all parties pulling together in the same direction – which is towards a cleaner planet with better air quality.

EV takeup might not be significant at the moment, but with wider availability of models, lower prices, longer ranges and more chargers, the electric future will be a reality sooner than we think.

Do you know your carbon footprint?

Sign up to the Carbon Planner today to find out how your business could potentially reduce emissions.

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

scroll to top